Leaders of Hamas, the militant Islamist group that controls the Gaza Strip, declare that its six-month cease-fire with Israel is over. The declaration is likely to lead to an increase in violence, and an Israeli official said Thursday that Hamas is "clearly interested in escalating the situation."

The collapse of the truce highlights a larger issue: No leaders — in the West or the Middle East — have come up with a practical strategy for dealing with the Gaza Strip. Hamas, which came to power after elections two years ago, rules the territory with a tight grip, and its control is expected to remain undiminished.

As a result, the political chasm between Gaza and the West Bank — the two territories meant to make up a future Palestinian state — looks increasingly permanent.

Policy Against Hamas Backfires

In Gaza City earlier this week, Hamas' Gaza leader, Ismail Haniyeh, celebrated the group's 21st anniversary. Surrounded by an estimated 200,000 supporters, Haniyeh told the crowd that the ongoing economic and political blockade of the territory had only made the group more resilient.

"Brothers and sisters, we confirm with this huge crowd on this great and special day that our people have only grown stronger since the siege of Gaza!" he said.

The policy of Israel and the West of trying to weaken and isolate the group after Hamas swept parliamentary elections in Gaza more than two years ago has largely backfired. Instead, it has mainly deepened the misery of ordinary Gazans who have borne the brunt of crippling economic sanctions and border closures. Now, many Gazans feel trapped between Israel's sanctions and the warring Palestinian factions, Hamas and Fatah.

'Crisis In Legitimacy'

Today, the rhetoric between Fatah and Hamas is divisive as ever. Hamas says that Fatah and Palestinian leader Mahmoud Abbas' presidential term ends early next year and, after Jan. 9, Hamas will appoint its own candidate as president of the Palestinian Authority. Gaza would then have its own head of government that leaders in the West Bank and the West will almost certainly dismiss as illegitimate.

In the meantime, Abbas says he has the authority to extend his term for one year, but that he may call new elections — a vote Hamas would likely ignore as illegal.

"We have a crisis in legitimacy," says Ghassan Khatib, a Palestinian analyst in the West Bank city of Ramallah. "The next year is going to witness expiry of legitimacy of many bodies and individuals."

Split 'Increasingly Irreversible'

Khatib notes that since seizing full control of Gaza by force in June 2007, Hamas has cracked down on opponents, promoted its supporters and kept Gaza's fragile economy from completely collapsing by allowing hundreds of smuggling tunnels to flourish along the Gaza-Egypt border. Hamas and other factions also have regularly fired rockets into Israel while the West Bank Palestinian leaders engage in ongoing — if ineffectual — peace talks with Israel.

The split between the West Bank and Gaza looks increasingly irreversible, which will have huge implications for the Palestinian people, says Khatib.

In addition to undermining the objective of an independent Palestinian state in the West Bank, Khatib says the split will damage further the image of the Palestinian people and cause, and it will worsen living conditions for Palestinians, especially in Gaza.

Lack Of Unity Threatens Peace Process

The deepening internal Palestinian rift could undo the already shaky U.S.-sponsored Annapolis peace process. Middle East analyst Shibley Telhami says the U.S. doesn't necessarily need to negotiate with or recognize Hamas. But the incoming Obama administration, he argues, would do well to pressure moderate Arab states to help bring about genuine Palestinian unity and preserve hope for a two-state solution that includes Gaza. Without unity, he says, a real peace process with Israel may be impossible.

"You have to bring about some kind of reconciliation that would allow the Palestinian Authority to negotiate credibly and would minimize the chance that Hamas is going to be a spoiler," Telhami says.

But that would mean Hamas, at least implicitly, recognizing Israel's right to exist and renouncing violence. The group has shown no inclination toward meeting those key concessions demanded by Israel and the West.

Long-Term Truce May Be Best Option

In fact, no leader or diplomat seems to have a viable solution to the Hamas challenge nor are any offering workable proposals to bring about Palestinian unity. Former Israeli lawmaker and longtime peace proponent Yossi Beilin says Palestinian unity is probably a pipe dream. Negotiations with the moderate Palestinian leaders in the West Bank should continue, Beilin says, but a long-term truce may be the best the Jewish state will ever get with Hamas.

"We'll have peace with half of them and an armistice with another one," Beilin says. That's not a solution, he admits, but when it comes to Hamas in Gaza, it's the best option he sees.